Colorado Medicaid Personal Needs Allowance (2026): What You Keep

In 2026, a Colorado Medicaid nursing-home resident who isn't a veteran or a veteran's widow(er) keeps $110.36 a month as a Personal Needs Allowance. After that and any other allowed deductions, the rest of their income goes toward the cost of their care. That figure, the Colorado Medicaid Personal Needs Allowance, is set by the state and sits well above the federal minimum. It's protected money that stays the resident's own to spend.1,2

In This Guide

• What the Colorado Medicaid Personal Needs Allowance Is, and Who Gets It
• Colorado's 2026 Figure Versus the Federal Floor
• Where the Money Is Held: The Resident Trust Fund
• How the Allowance Fits Your Monthly Care Bill
• What the Facility Can't Bill to Your Colorado Medicaid Personal Needs Allowance
• If the Resident Is a Veteran
• Frequently Asked Questions
• Learn More

What the Colorado Medicaid Personal Needs Allowance Is, and Who Gets It

When someone moves into a nursing home and Medicaid pays for their care, they don't hand the facility a rent check. Instead, most of their monthly income, their Social Security, a pension, and so on, is redirected to help pay for the care Medicaid is covering. That redirected amount is called the resident's patient liability, or share of cost.

Federal law doesn't let the facility take everything, though. Every resident gets to keep a small, protected slice of their own income each month for the things Medicaid doesn't buy: clothing, a phone bill, a haircut, snacks, a magazine, a birthday gift for a grandchild. That protected slice is the Personal Needs Allowance, and in Colorado it's $110.36 a month for 2026 for a resident who isn't a veteran or a veteran's widow(er).1 Veterans and their widow(er)s in certain situations get a separate, lower figure, covered below.

Here's who this applies to. The Personal Needs Allowance is for people receiving Medicaid-funded institutional care, primarily nursing-facility residents. It exists so that a person whose entire income now flows toward their care still has money of their own for personal dignity and choice. Without it, a resident's whole Social Security check would go to the facility, leaving nothing for the small purchases that make daily life feel like life.

Colorado Medicaid, known as Health First Colorado and run by the state's Department of Health Care Policy and Financing, applies this rule to nursing-facility residents statewide. The $110.36 figure is the amount a non-veteran resident keeps from their own income each month. A resident who works keeps more: Colorado lets an aged, blind, or disabled resident with income-producing activity retain an additional $65 a month plus one-half of the remaining gross income.1

Colorado's 2026 Figure Versus the Federal Floor

Federal law sets a minimum Personal Needs Allowance, not a fixed amount. Under the Medicaid statute, states must let an institutionalized individual keep at least $30 a month (and at least $60 for an institutionalized couple where both spouses are aged, blind, or disabled and their incomes are considered available to each other). Those figures have been frozen since the Omnibus Budget Reconciliation Act of 1987 made them effective in July 1988, and they haven't changed since.2

The $30 floor is a minimum, not a ceiling. A state must set its nursing-facility allowance at or above $30 and is free to set it higher. Tennessee, for example, subtracts a $70 allowance from a nursing-facility resident's income.2

Colorado's $110.36 non-veteran figure is more than three times the federal minimum.1,2 For a resident, that difference is real money: the extra room above the federal floor is what pays for the phone, the clothing, and the incidentals a nursing home doesn't cover.

One practical note. Colorado's rule adjusts the non-veteran allowance every year, and $110.36 is the 2026 amount the state publishes, so always confirm the current amount with the facility's business office or with Health First Colorado when you're doing the math.1

Where the Money Is Held: The Resident Trust Fund

A resident's Personal Needs Allowance has to live somewhere, and one option is a resident trust fund account that the nursing home manages on the resident's behalf. Federal nursing-facility rules give the resident the right to handle their own money, and a facility can't force anyone to deposit personal funds with it. But when a resident chooses to deposit money with the facility and authorizes it in writing, the facility has to act as a fiduciary.3

That fiduciary role comes with specific duties under federal regulation. For a Medicaid resident, any personal funds over $50 must be kept in an interest-bearing account that's separate from the facility's own operating accounts. The facility has to keep a full, separate accounting with no commingling of resident money with facility money or anyone else's, and it has to make that individual record available to the resident, both through quarterly statements and on request. It also has to protect the funds with a surety bond or a similar assurance, and it must warn a Medicaid resident when the account reaches $200 less than the SSI resource limit for one person, because a balance at that limit, counted with the resident's other nonexempt resources, can cost them Medicaid or SSI eligibility.3

The accounting rules matter most at two moments: when you want to check that the allowance is actually being credited each month, and when a resident dies. On discharge, eviction, or death, the facility must convey the remaining funds and a final accounting within 30 days: to the resident, or, after a death, to the person or probate jurisdiction administering the estate.3 If you're a family member managing a loved one's account, the quarterly statement is your best tool: read it, and ask questions if a charge looks wrong.

How the Allowance Fits Your Monthly Care Bill

It helps to see where the Personal Needs Allowance sits in the arithmetic. Each month, the state starts with the resident's gross income and subtracts a set of protected amounts before whatever's left is applied to the cost of care. The Personal Needs Allowance is the first of those protected amounts.

Federal rules make the Personal Needs Allowance one of several deductions, not the only one. For institutionalized residents in SSI states, the federal regulation lists them in order, starting with the Personal Needs Allowance, a maintenance allowance for a spouse or family still at home, and amounts for medical expenses no third party covers, including Medicare and other health-insurance premiums, deductibles, and coinsurance.2 In Colorado, the allowance itself is $110.36 for a non-veteran resident.1 Whatever income remains after those subtractions is the resident's patient liability, the share they owe the facility each month. Medicaid then pays the rest of the bill.

The spousal piece is worth flagging for married couples. Colorado has its own spousal-protection rules for a couple where one spouse is in a nursing home and the other lives at home.1 On the income side, two federal standards apply in 2026: a Minimum Monthly Maintenance Needs Allowance of $2,705.00 a month (effective July 1, 2026, in every state except Alaska and Hawaii) and a maximum Monthly Maintenance Needs Allowance of $4,066.50 a month (effective January 1, 2026).5 That maximum isn't an absolute ceiling: if either spouse shows at a fair hearing that the at-home spouse needs more income because of exceptional circumstances causing significant financial duress, federal law substitutes a higher amount.5 How Colorado turns those standards into the at-home spouse's monthly allowance is a state calculation, so ask Health First Colorado or the county eligibility worker for the figure in your case. When a maintenance allowance is diverted to the at-home spouse, that money comes out of the resident's income before patient liability, which can reduce what the resident owes the facility.2 The Personal Needs Allowance and the spousal maintenance allowance are two separate protections, and a married resident can benefit from both.

The takeaway for a family doing the math: the allowance isn't money the resident has to find somewhere. It's money that's carved out of their own income and kept for them before the facility gets its share.1

What the Facility Can't Bill to Your Colorado Medicaid Personal Needs Allowance

A common and costly misunderstanding is that the Personal Needs Allowance is meant to cover the ordinary supplies and services of daily nursing-home life. It isn't. Federal rules are specific: a long list of routine items and services is already included in the Medicaid payment the facility receives (its per-diem rate), and during a covered stay the facility must not charge the resident for them.6

Under 42 CFR 483.10(f)(11)(i), the items covered by the facility's payment, and therefore off-limits to your allowance, fall into seven categories: nursing services, food and nutrition services, an activities program, room and bed maintenance, routine personal-hygiene items and services, medically related social services, and hospice services the resident has elected that Medicare or Medicaid pays for. The personal-hygiene category is broader than many families realize. It covers things like hair-hygiene supplies, a comb and brush, bath soap, a razor and shaving cream, a toothbrush, toothpaste, denture adhesive and cleaner, moisturizing lotion, incontinence care and supplies, towels and washcloths, over-the-counter drugs, hair and nail hygiene services, bathing assistance, and basic personal laundry. Because these are already paid for through the per-diem, the facility can't bill them to the resident's personal funds.6

So what is the allowance actually for? The extras the facility doesn't have to provide: a personal cell phone, a favorite brand of toiletries beyond the standard supplies, clothing the resident chooses, snacks, subscriptions, outings, and gifts. Even for those extras, federal rules let the facility charge the resident's funds only if the resident requested the item, it isn't required by the care plan, the facility said there would be a charge, and Medicare or Medicaid isn't paying for it.6 If you see one of the routine items above showing up as a charge against a loved one's account, that's worth questioning with the facility's business office, because federal rules say those costs belong to the per-diem, not to the resident.

If the Resident Is a Veteran

Veterans on a VA pension have a rule of their own, and it's easy to misread. Ordinarily, when a veteran enters a Medicaid-covered nursing home, most of their income shifts toward the cost of care. Here, federal law steps in by capping the pension itself.

Under federal statute, when a veteran who has neither a spouse nor a child is covered by Medicaid for nursing-facility care, no VA pension above $90 a month may be paid for periods after the month of admission. The same cap applies to a surviving spouse with no child. VA's own regulation, 38 CFR 3.551(i), words the start differently: it caps the pension for periods after the month in which Medicaid payments begin. If Medicaid was approved some months after admission, those two months aren't the same, so confirm with the VA which month the reduction runs from rather than working out a back amount yourself. A veteran isn't liable to repay pension the VA failed to reduce, unless that failure came from the veteran willfully concealing information. And the Medicaid payment to the facility can't be reduced by the pension the veteran is allowed to keep, so the state can't take that $90 back through the facility's bill.4

There is one setting the cap doesn't reach, and it's worth checking first. At 38 U.S.C. 5503(d)(1)(B) the statute defines the nursing facilities it covers, and that definition leaves out a state veterans home for which the VA makes per diem payments for nursing home care. A veteran on Medicaid who lives in a state veterans home the VA makes those per diem payments for is not held to the $90 figure at all. The exclusion is written in terms of how the home is paid, which is not something a brochure will tell you, so put the question to the home's admissions office or the county eligibility worker before you work out a monthly number.4

What the federal rule stops short of saying, for a veteran the cap does cover, is whether the veteran ends up holding that $90 on top of the state's Personal Needs Allowance or in place of it. That's a state call, and states have landed on different answers.4 Colorado's rule sets the Personal Needs Allowance at $90 a month, not the $110.36 non-veteran figure, for a veteran in a long-term care institution who has no spouse or dependent child and receives a non-service-connected disability pension from the VA, and also at $90 for the widow(er) of a veteran with no dependent children.1 If your loved one is a veteran receiving a VA pension and is now in a Medicaid nursing home, ask Health First Colorado or the county eligibility worker how the two are handled together, and check the share-of-cost notice against the answer, because the pension cap and the allowance come from different programs.

Learn More

Find personalized help understanding what a Colorado nursing-home resident keeps on Medicaid at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.